Saturday, July 4

Ocean Vantage to raise RM21.4 million from IPO

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Kenny (centre) poses with (from left) M&A Securities’ Corporate Finance head Gary Ting, M&A Securities’ corporate finance managing director Datuk Bill Tan, Ocean Vantage independent non-executive chairman Nor Azzam Abdul Jalil, Ocean Vantage executive director Martin Phillip King, Ocean Vantage executive director Stephen Yau and Ocean Vantage chief financial officer Chang Vun Lung.

KUCHING: Sarawak-based oil and gas (O&G) integrated support services provider, Ocean Vantage Holdings Bhd (Ocean Vantage) has just concluded the first-ever fully digital prospectus launch in Malaysia yesterday.

The digital launch event was held in conjunction with the group’s upcoming listing on the ACE Market of Bursa Malaysia Securities Bhd (Bursa Securities).

“As the world transition to the new normal, we too, are doing things differently,” Ocean Vantage managing director Kenny Ronald Ngalin said.

“For a start, we are incredibly pleased to deliver this landmark digital prospectus launch to viewers from all around the world. At Ocean Vantage, transcending limit is what we strive for in everything we do.”

“We are also excited that we are yet another step closer to being a listed entity. Besides elevating our status to the next level, proceeds from the listing will help fund our expansion plans.

“We are charting our way forward, steadfastly focused on our longer-term objectives and strategic directions, notwithstanding the current challenging operating landscape.”

Ngalin highlighted that the O&G industry outlook remains promising for outsourced support services providers such like Ocean Vantage, as major industry players are increasingly consolidating their operations and workforce, preferring to outsource functions to external service providers.

“Additionally, we are expanding our market presence in the downstream segment to further capitalise on the opportunities arising from development activities in the onshore areas along the Sarawak Corridor of Renewable Energy (SCORE).”

“At Ocean Vantage, we have deliberately chosen to adopt an asset-light strategy from day one for its flexibility, agility and scalability, which is rather uncommon in an industry where it is usually capital-intensive.

“This strategy has also helped us maneuver through the oil price cycle. Whether oil price is US$100 or US$40 per barrel, our business is intact.

“Our agile and adaptive business model has proven its resilience over the years as reflected in the growth of our operations and financial performance.”

For perspective, the group’s revenue grew from RM17.6 million in the financial year ended
Dec 31, 2016 (FY16) to RM58.3 million in FY19, representing a three-year compound annual growth rate (CAGR) of 48.9 per cent.

Profit after tax rose from RM2.7 million to RM6.9 million during the same period, reflecting a three-year CAGR of 36.7 per cent.

Another positive industry development, he added, is the rising number of active rigs in recent years as it signifies the potential increase in demand for offshore oilfield services.

According to the Independent Market Researcher, Providence Strategic Partners Sdn Bhd, the number of active rigs globally has been on an uptake, increasing from an average of 1,593 rigs in 2016 to an average of 2,177 rigs in 2019, at a CAGR of 11 per cent.

A similar trend was witnessed in the number of active rigs in Malaysia, where there was an uptake between 2016 and 2018 from an average of four rigs to an average of seven rigs, recording a CAGR of 32.3 per cent. In December 2019, the number of active rigs in Malaysia stood at 12 rigs.

From the initial public offering (IPO) exercise, Ocean Vantage will be raising approximately RM21.4 million from its public issue, of which RM3.2 million or 15.1 per cent of total proceeds will be used to broaden its range of support services for the upstream O&G industry to include underwater diving services as well as advance non-destructive testing and inspection services.

Meanwhile, RM8.6 million (40.2 per cent) will be used as capital expenditure to strengthen its project management capabilities in the downstream O&G segment, RM6.6 million (30.7 per cent) for working capital, with the balance RM3 million (14 per cent) earmarked for listing expenses.

Ocean Vantage’s IPO exercise entails a public issue of 82.2 million new shares, representing 20 per cent of its enlarged share capital, together with an offer for sale of 41.1 million existing shares.

Pursuant to the launch of Ocean Vantage’s prospectus, applications for the Public Issue are open as June 30, 2020 and will close on July 9, 2020 at 5pm. Ocean Vantage is scheduled to be listed on the ACE Market of Bursa Securities on July 22, 2020.

Upon listing, Ocean Vantage will have a market capitalisation of RM106.9 million based on the issue price of RM0.26 and its enlarged share capital of 411 million shares.

M&A Securities Sdn Bhd (M&A Securities) is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.